McCormick sees FY17 adj. EPS$4.20-$4.24, consensus $4.13
For FY17, McCormick updated its financial outlook to reflect its year-to-date performance and growth momentum, the acquisition of RB Foods and a lower impact from unfavorable foreign currency on EPS. In 2017, McCormick expects to grow sales 9% to 10% compared to 2016. Excluding the impact of unfavorable currency rates, the projected growth is 10% to 11%. The company expects to drive sales growth with new products, brand marketing, expanded distribution and the incremental sales impact of acquisitions. Sales growth is also expected to be driven by pricing actions that are intended to offset an anticipated mid-single digit increase in material costs. The company has plans to achieve at least $105 million of CCI and intends to use these savings to improve margins, fund a high-single digit increase in brand marketing, and as a further offset to increased material costs. Operating income in 2017 is expected to grow 10% to 11% from $641 million of operating income in 2016. Transaction and integration expenses from the RB Foods acquisition of approximately $62 million are currently projected to impact operating income for 2017. Special charges of approximately $22 million are currently projected for 2017 that related to previously announced organization and streamlining actions. Excluding the impact of transaction and integration expenses as well as special charges in 2017 and 2016, the expected growth in adjusted operating income is 20% to 21% from adjusted operating income of $657 million in 2016. Excluding the estimated impact of unfavorable currency rates, the expected year on year increase in adjusted operating income is 21% to 22%.